How to ne­go­ti­ate in the cur­rent mar­ket

Logic and cun­ning will help a ne­go­ti­a­tior de­cide how far he can go to test the lim­its of a de­vel­oper’s pa­tience be­fore a good deal is struck

HT Estates - - Front Page - Ramesh Nair

Yes, it is pos­si­ble to ne­go­ti­ate with res­i­den­tial prop­erty de­vel­op­ers. As home sales con­tinue to look slug­gish in many parts of the coun­try, de­vel­op­ers are be­com­ing more open to a bit of cre­ativ­ity on their stated terms. How can you, as a buyer, put your best foot for­ward at the ne­go­ti­a­tion ta­ble? Above ev­ery­thing else, the Scout’s motto holds true – Be Pre­pared.

You should be con­ver­sant with com­pa­ra­ble sales in the project’s vicin­ity, and know how long it has been on the mar­ket. It is im­por­tant to es­tab­lish what the launch rates were, how they have moved since then and what the cur­rent de­mand for flats like yours is in the stated lo­cal­ity. You should also find out by word of mouth how much the de­vel­oper is will­ing to ne­go­ti­ate. Typ­i­cally, de­vel­op­ers make de­ci­sions on pric­ing based on how a par­tic­u­lar project is per­form­ing.

If you are in­ter­ested in an apart­ment but feel you can­not af­ford it at the quoted price, do not worry. Many sale prices to­day are quoted prices, and there is room for ne­go­ti­a­tion. While de­vel­op­ers to­day are will­ing to re­lent off the radar, they are averse to re­duc­ing the of­fi­cial quoted price be­low a cer­tain point. This is par­tially be­cause they don’t want to ad­ver­tise the fact that cer­tain cus­tomers paid less than oth­ers. They are of­ten like­lier to of­fer free­bies or in­cen­tives.

If pos­si­ble, try to find a group of buy­ers and ne­go­ti­ate for a bulk dis­count. Keep in mind that that if you have the abil­ity to pay a larger up­front amount, you have ex­tra bar­gain­ing power

En­sure that you have ob­tained a pre-ap­proved loan from a home fi­nance

com­pany for a home loan, based on your in­come. A loan pre-ap­proval will show the de­vel­oper that you are se­ri­ous. Let him know that you are pre-qual­i­fied for the amount you are of­fer­ing.

If sales vol­umes have dropped and there are many un­sold apart­ments in the­vicin­ity, point this out to the de­vel­oper and use the fact to your ad­van­tage. An un­sold apart­ment will cost the de­vel­oper more over time than low­er­ing the price and sell­ing the unit quickly. If mar­ket prices have fallen since the prop­erty was com­pleted and sev­eral units re­main un­sold, a larger dis­count may be pos­si­ble

Mak­ing an of­fer

Sub­mit an of­fer to pur­chase the apart­ment even if you are un­sure whether the de­vel­oper will ac­cept the of­fer. Some de­vel­op­ers will not be­gin ne­go­ti­a­tions un­til you make a firm of­fer.

The best strat­egy is to drive around the lo­cal­ity you are in­ter­ested in and get the best prices from each de­vel­oper. Then shorten the list to the op­tions you are re­ally in­ter­ested in and go on a re­sult-ori­ented, two-day prop­erty sa­fari. Let each de­vel­oper know that you are look­ing for the best project at the best price, and that you are def­i­nitely buy­ing that week­end. Let them know that you are weigh­ing their of­fers against the other ones avail­able.

Re­mem­ber – with­out mak­ing a for­mal of­fer, there is re­ally no way to know how low a de­vel­oper will go on his price. While mak­ing your of­fer, vol­un­teer in­for­ma­tion such as where you work and how much you earn to as­sure the de­vel­oper that you can af­ford the prop­erty. Al­ways of­fer to close the deal fast and make sure you men­tion this dur­ing the ne­go­ti­a­tion. Also en­sure that you get the de­vel­oper to com­mit first.

Don’t back down

Ne­go­ti­ate for what you es­ti­mate to be a realistic price. If the de­vel­oper re­fuses, don’t be sur­prised if you hear back from him a few days later, will­ing to re­con­sider your of­fer. There is greater flex­i­bil­ity in ne­go­ti­at­ing the ex­tras ver­sus the base sales price. With­out mak­ing an ob­vi­ous dis­play of sat­is­fac­tion, con­vey that you need to look at your num­bers be­fore you take a de­ci­sion.

Your goal is to pur­chase a home – not to beat the de­vel­oper down. Know when to walk away. Al­ways re­mem­ber that price is not the only ne­go­tiable in­stru­ment in your hand. Re­mem­ber, most de­vel­op­ers hate to hag­gle, so gather all your ne­go­ti­at­ing points into a sin­gle of­fer and po­si­tion it as a take-it-or­leave-it propo­si­tion. At the end of the day, there may be some projects where the de­vel­oper is sim­ply not in the mood to ne­go­ti­ate. If he re­mains adamant and you can­not agree on a bet­ter price for a flat for which you have other op­tions, walk away.

Note that here are many fac­tors that will in­flu­ence the de­vel­oper’s low­est ac­cept­able price. These in­clude the pre­vail­ing mar­ket con­di­tions, the de­vel­oper’s fi­nanc­ing pat­tern, whether he is in a rush to sell or happy to wait for a higher of­fer, how much he paid for the land etc.

If you think the price is far higher than cur­rent mar­ket prices, it is pos­si­ble that the de­vel­oper pur­chased the land dur­ing the mar­ket peak. In such a case, he will re­main in­flex­i­ble on his rate since he will not want to sell at a loss.

A good ne­go­tia­tor does not al­low his de­sire to own a cer­tain prop­erty be very ob­vi­ous dur­ing the ne­go­ti­a­tion process. Also, he or she does not to take any­thing per­son­ally and can, there­fore, see op­por­tu­ni­ties ob­jec­tively. Fi­nally, a good ne­go­tia­tor al­ways has other op­tions, never re­veals weak­nesses, plays his or her cards close to the chest and does not take trust for granted.

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